Britain will have the highest inflation of any major economy in 2023, according to forecasts from the Organization for Economic Co-operation and Development, which show Prime Minister Rishi Sunak will not deliver on his promise to halve price growth this year.
Britain’s headline inflation rate is expected to be 6.9% in 2023, higher than Germany (6.3%) and France (6.1%) and the average of the OECD (6.6%), the group said in a new set of projections of its members’ economies, released on Wednesday.
If those forecasts prove accurate, Mr Sunak will miss his target of halving inflation this year, one of the priorities he has presented to voters ahead of national elections scheduled for 2024.
However, the OECD has said it expects UK inflation to slow to 2.8% in 2024, a lower rate than France and Germany.
Britain’s stubbornly high inflation rate has bolstered expectations that the Bank of England will continue to raise borrowing costs, which could push the economy into a recession it has so far avoided now.
Finance Minister Jeremy Hunt highlighted the improved OECD forecast for the economy, which is now expected to grow by 0.3% in 2023 and 1.0% in 2024.
Previously, the OECD predicted the economy would contract by 0.2% this year and grow by 0.9% next year.
“Today’s report reinforces our growth forecast, welcomes the steps we’ve taken to help parents get back to work by significantly expanding free childcare, and recognizes our tax cuts on companies, which aim to stimulate investment,” Hunt said in a statement.
“But if inflation remains too high, we must stick relentlessly to our plan to halve it this year. This is the only long-term way to grow the economy and ease pressures. exerted by the cost of living on families”.
This article is originally published on zonebourse.com